The Metro Gang Strike Force seized 19 vehicles, which it then turned over to a St. Paul used-car dealer for resale, even though the vehicles had not been properly forfeited, the Minnesota Legislative Auditor reported on Wednesday.

Those vehicles were among 29 which the Strike Force "sold" in a handshake deal -- though the Strike Force apparently never received any payment -- to Cars With Heart, a for-profit St. Paul car dealer, the auditor said.

In at least one instance, the owner of one of the cars took Cars With Heart and the Strike Force to conciliation court and recovered $2,390, most of it for towing and storage charges he had to pay the dealer.

While Legislative Auditor Jim Nobles told reporters Wednesday he'd found no instances of criminality, he recommended the Legislature do a "comprehensive evaluation" of Strike Force operations.

Nobles discussed his report at a state Capitol hearing, where state Sen. Ann Rest, DFL-New Hope, called his latest findings "just beyond outrageous." The audit said its findings reinforced those in another report Nobles released last month in which he said the Strike Force had managed, seized and disposed of vehicles without adequate controls, authorization and documentation.

The Strike Force is being investigated by the FBI, with a second inquiry underway by a panel created by Public Safety Commissioner Michael Campion. Operations at the Strike Force were suspended May 20 after Strike Force officials discovered some of the 34 members were removing files from their New Brighton headquarters and shredding other records. The unit, which began in 1997, investigates criminal activity of gangs, including drug dealing in the Twin Cities area.

Nobles last month issued a report highly critical of the Strike Force's internal operations. Among other things, he reported that at least 13 seized or forfeited cars vehicles were not accounted for between August 2005 and October 2008.

A few days later, Ramsey County Sheriff Bob Fletcher said members of his department had found the cars.

Nobles -- who called Fletcher's effort "well-intentioned" -- asked the sheriff for records his office used in locating the cars, which led to the new report.

"Physically locating vehicles has some value, but it does not address whether vehicles were appropriately handled by the Strike Force," it said. "We were particularly interested in following up on a statement made by the Ramsey County Sheriff's Office in a memorandum dated May 28, 2009, which said: '3 [Strike Force] vehicles were turned over to Cars With Heart and then sold to private individuals.'"

Fletcher could not be reached for comment.

The auditor said that in 2006, a Strike Force officer approached Cars With Heart about buying 80 to 100 vehicles seized by the Strike Force. "While known for facilitating contributions to charitable nonprofit organizations based on car donations, Cars With Heart is a private, for-profit used-car business," the auditor said.

According to representatives of Cars With Heart, its arrangement with the Metro Gang Strike Force did not involve an agreement to make contributions to charitable nonprofit organizations, the auditor said. Representatives of Cars With Heart characterized their arrangement with the Strike Force as a "bid-and-buy" transaction, which resulted in Cars With Heart acquiring 29 vehicles.

The audit report said it had found the following:

•There was no formal bid solicitation process. Initially, 80 to 100 vehicles were going to be involved in the transaction. But Cars With Heart representatives said they received 29 vehicles, including some that had not been identified in the original selection process.

•The purchase was finalized as a "handshake" agreement with no formal, written deal. The parties to the agreement recalled the "bid" amount, or purchase price, was going to be between $5,000 and $6,000 for all 29 cars, many of which were described as junkers. However, there is no documentation to support this agreement, the auditor said.

•The Strike Force never billed Cars With Heart for the vehicles, and no payment was ever made to the Strike Force, although representatives from Cars With Heart told the auditor that they would have made the payment if billed.

•The auditor found that of the 29 vehicles sold to the used-car dealer, 19 had not been properly forfeited. Under Minnesota law, vehicles may be seized during any lawful search or arrest, and if a police agency takes the proper steps, including notifying the owner of the right to contest the forfeiture, it can sell or keep vehicles.

"Of the 19 not properly forfeited, 11 were subsequently sold, six were scrapped, and two remain in inventory," the auditor said.

"In one instance involving a vehicle that had not been properly forfeited, the owner came to Cars With Heart to retrieve his vehicle," the report said.

The owner, Houa Vang, 31, of St. Paul, said in an interview with the Star Tribune that his car was seized after at least 10 Strike Force members turned up at his apartment, ordering him and four relatives to sit on a sofa and threatening to shoot them if they moved. He said they ransacked the apartment, telling him they were looking for "evidence," and demanded the keys to his 2002 Honda Accord parked outside, which they claimed had been used as a getaway vehicle in an unspecified crime. They towed away the car on or about June 2, 2006, according to court records.

Vang, who was not arrested, said he had no idea what crime they were investigating. A month passed and his car was not returned. He said when he called the Strike Force, they told him to go to Cars with Heart. When he arrived, he said, the car had new plates on it. After several visits, the Accord was returned to him -- but only after he paid Cars with Heart $1,990, apparently for storage and towing fees, according to court records.

Vang sued the Strike Force and Cars with Heart in conciliation court, and after Cars with Heart failed to make two court appearances, a court referee awarded Vang $2,390 to cover his expenses and $340 in property that disappeared from his car, including a $240 amplifier.

Vang said he was not a gang member and said the Strike Force "act like bullies," although he said he was not angry at anyone.

The Legislative Auditor also reported another case in which Cars with Heart sold a Corvette that was subsequently sold to a private party, but title problems took a year and a half to resolve.

The auditor said it found no evidence that Cars With Heart acted improperly in dealing with the Strike Force. Representatives of Cars With Heart did not return phone calls.

The auditor also found that the Strike Force contracted with Twin Cities Transport and Recovery of St. Paul for towing and storage of seized vehicles, but it did not provide the company with accurate instructions for properly disposing of vehicles. As a result, the company disposed of some cars that had been properly forfeited to the Strike Force, but the Strike Force did not receive any compensation for them, the auditor said.

On the other hand, the Strike Force "has not paid the transport company since September 2008," the auditor noted, and as of May 31, it owed the company $9,878 in towing and storage fees.

The auditor said he found no evidence that Twin Cities Transport acted improperly. A company representative declined comment.

Staff writers Abby Simons and Pat Pheifer contributed to this article.

Randy Furst • 612-673-7382